Error extruding loop selection along individual face normals
The normals on your object are not correct because the object is rotated 90 degrees in object mode.
To fix select your object, press CtrlA and Apply Rotation and Scale. Then your normals will work for the extrusion operation you want to do.





read: http://wiki.blender.org/index.php/User:Fade/Doc:2.6/Manual/3D_interaction/Transform_Control/Reset_Object_Transformations and http://blenderartists.org/forum/archive/index.php/t-106188.html